REITs: The Bigger the Better in 2011

Alan Brochstein, CFA submits:
If you have been investing in REITs this year, you should be happy, right? Maybe you have owned one of the highly liquid ETFs designed to replicate the sector, like iShares DJ Real Estate (IYR), which is up over 9%, Vanguard REIT (VNQ), which is up almost 11%, or SPDR Wilshire REIT (RWR), which is up 11.5%. Nice, right? Unfortunately, these fantastic returns are misleading, as the typical REIT isn't faring nearly as well. The average return YTD for all REITs in excess of $200mm market cap currently (123 companies) is just 5.4%. Of the 123, 45 are up in excess of 10%, while 39 are actually down in price. I have had a theory that I wanted to test, so I did. As you can see in the histogram below (click to enlarge), which has YTD return on the y-axis and the market-cap on the x-axis (log-scale), there isComplete Story »

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